U.S. Markets close in 6 hrs 7 mins

Is Dyadic International, Inc. (NASDAQ:DYAI) Excessively Paying Its CEO?

Simply Wall St

In 2004 Mark Emalfarb was appointed CEO of Dyadic International, Inc. (NASDAQ:DYAI). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Dyadic International

How Does Mark Emalfarb's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Dyadic International, Inc. has a market cap of US$141m, and reported total annual CEO compensation of US$1.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$393k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$523k.

It would therefore appear that Dyadic International, Inc. pays Mark Emalfarb more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Dyadic International has changed over time.

NasdaqCM:DYAI CEO Compensation, January 2nd 2020

Is Dyadic International, Inc. Growing?

Dyadic International, Inc. has reduced its earnings per share by an average of 51% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 153% over the last year.

Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Dyadic International, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Dyadic International, Inc. for providing a total return of 209% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We examined the amount Dyadic International, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Dyadic International shares with their own money (free access).

Important note: Dyadic International may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.